Hines REIT to buy Williams Tower, née Transco

Published 5:30 am, Tuesday, March 25, 2008

A subsidiary of Hines Real Estate Investment Trust is buying the 65-story Williams Tower in the Galleria area for $271.5 million, according to a document filed with the Securities and Exchange Commission.

The sale includes an adjacent parking garage, a 47.8 percent undivided interest in a 2.8-acre park and waterwall and a 2.3-acre land parcel across the street from the tower on Post Oak Boulevard.

The balance of the undivided interest in the park and waterwall is owned by an affiliate of Hines Interests Limited Partnership.

Houston-based Hines built the 1.5-million-square-foot Transco Tower in 1982. It was eventually renamed and is approximately 91 percent leased.

Transcontinental Gas Pipe Line Corp, a natural gas pipeline operator and subsidiary of Williams Cos., leases 250,001 square feet, or approximately 16 percent of the building's rentable area, under a lease that expires in March 2014 and contains options to renew for three additional five-year periods.

Telecommunications infrastructure provider Black Box Network Services, formerly known as NextiraOne, leases 186,777 square feet, or about 12 percent of the building's rentable space, under a lease that expires in March 2009.

And the remaining space is leased to 48 tenants, none of which leases more than 10 percent of the building's rentable area.

Williams Tower is currently managed by Hines, which is based in the building.

The deal is expected to close on May 1. If the REIT defaults on the contract and it does not close, the company will lose its $30 million earnest money deposit.